Tuesday, May 27, 2008

Singapore Healthcare Model: Patients and Doctors Make Decisions, Not Government Bureaucrats

Why hasn’t the United States adopted the same healthcare system as Europe, Canada, and nearly all the rest of the developed world? While the United States is portrayed as the outlier, the truth is that another developed nation has eschewed the European government-payer model—with a great deal of success. That nation is Singapore, a city-state with a population of just 4.6 million but a lot to teach America.

Singaporeans are considerably healthier than Americans, yet pay, per person, about one-fifth of what Americans pay for their healthcare (see some comparative statistics above). A major reason is that Singapore’s system does not focus on the question that seems to preoccupy both Europe and America: who pays? Ultimately, whoever signs the checks, the money comes out of the pockets of individuals. Singapore takes a different tack. What’s the reason for Singapore’s success? It’s not government spending. The state, using taxes, funds only about one-fourth of Singapore’s total health costs. Individuals and their employers pay for the rest. In fact, the latest figures show that Singapore’s government spends only $381 (all dollars in this article are U.S.) per capita on health—or one-seventh what the U.S. government spends (see chart above).

Singapore’s system requires individuals to take responsibility for their own health, and for much of their own spending on medical care. As the Health Ministry puts it, “Patients are expected to co-pay part of their medical expenses and to pay more when they demand a higher level of service. At the same time, government subsidies help to keep basic healthcare affordable.”

The reason the system works so well is that it puts decisions in the hands of patients and doctors rather than of government bureaucrats and insurers. The state’s role is to provide a safety net for the few people unable to save enough to pay their way, to subsidize public hospitals, and to fund preventative health campaigns.

The distribution of population over a large area is a major factor in driving cost due to the multiplicity of service delivery models required.

Quite simply comparing a densely populated city-state of 4.6 million to the U.S. is an apples & oranges comparison. It would be more reasonable to compare Singapore to Hong Kong and compare the U.S. to Canada or Austrailia.

Yes, costs are driven lower due to the proximity of the health service provided in Singapore to each other. However, by concentrating on that factor limits your vision to the main point of the story. The article is trying to highlight the benefits of getting the citizens of the country to be financially responsible for their own health, rather than relying on the government or insurance companies.

Being financially responsible for your own health not only strengthens the disciple for the maintenance of one's health, it also free up cash for the government to pursue other benefits that will affect health less directly (eg. funding for promotion of healthy diets, health club subsidies, reduction of pollution, etc), or simply use extra funds to improve the economy of the country (lowering taxes in this case). The link between individual's health and the health of the country's economy has been pretty evident thus far, and this can be treated as another indirect way of improving health without spending directly on health funding

Very interesting article. Despite being an Toronto life insurance broker I provide optional health insurance as well and I am very intersted in this topic, because it's still more and more discussed also here. But I don't understand it much - I believe Americans spend HUGE money from their pockets for healthcare and still aren't much motivated (obesity, lack of sport...you know the story). What's the difference in Singapore? Isn't it caused more by the different "spirit" of society and better habbits?

I think one can not make a correct aggregate comparasion of health costs / GDP without considering the living style of two populations. I am not an expert but I guess Americans (due to their unhealthy diet and more stressful life) are more subject to go for medical service than Singaporians. You should first control for this factor.